Cryptocurrency exchange Coinbase has unveiled a new feature that will allow eligible customers in the US to borrow up to $1m in cash by using their Bitcoin as collateral.
With the feature, customers in selected US states will be able to “take out a line of credit” without any prior credit checks – equivalent to “as much as 40% of the value of the Bitcoin” in a user’s account, up to $1m.
The borrowed cash can be deposited quickly and fee-free to a bank or PayPal account, with $10 minimum payments required each month to pay the interest due.
Customers can then pay off their outstanding balance when ready, with their collateralised assets stored safely on Coinbase.
Coinbase will also offer fixed-term loans, which are currently only available for Coinbase customers in Connecticut.
Fixed-term loans will enable customers to borrow up to 30% of the value of their Bitcoin in cash (up to $100,000) on a one-year basis.
Only monthly interest of 8% APR is paid on the loan, with the principal repayable after a year.
Coinbase also noted that it will not report any “loan-related information or activity to credit reporting agencies at this time”.
Coinbase continues to drive adoption
The ‘borrow’ feature is Coinbase’s latest move in a spate of recent efforts to improve the user experience for its 68m-strong userbase.
The exchange recently became the leading US mobile application for iPhone users due to rampant interest in Shiba Inu and has also introduced a “paycheck deposit” feature to bring greater adoption of cryptocurrencies in the US.
Coinbase has also made notable developments in the adoption of its native Coinbase Card by allowing customers to “immediately earn interest” on their income and earn crypto rewards by using one. The exchange also recently integrated Apple and Google Pay services into its card services.
The upcoming launch of its native NFT marketplace is also expected to attract vast amounts of new customers to the ever-expanding Coinbase ecosystem.